By Brian O’Neill,O’Neill Properties Group
Some things never change. While these are challenging and uncertain times for some commercial developers, with marketplace instability, liquidity concerns and a burgeoning credit crunch creating a difficult environment for new projects. But it may be reassuring to consider that the fundamental factors that determine the ultimate success or failure of a mixed-use project remain unchanged.
The key components of a successful center are:
• Location
• Visibility
• Demographics
• Psychographics
• Accessibility
• Traffic flow
• Zoning
• Design style
And these components are universal, vital and defining elements that resonate across markets and span regional and stylistic divides. The importance of these core characteristics endures despite (or perhaps even because of) the influence that outside factors can play over a new development. For developers, getting back to the basics by refocusing on these key determinative factors is perhaps even more important during a downturn. Taking an analytical approach by assessing new projects through this lens can help clarify a project’s realistic prospects and determine which developments have the best chance for success. In a tough market, only the best projects will make it to groundbreaking, and the short- and long-term financial success can subsequently have a disproportionately large impact on both the surrounding community and a developer’s bottom line.
Some of these universal ideas may seem obvious; some may seem somewhat obscure. Some may seem tremendously important, and some may at first glance appear to be relatively inconsequential. But in the final analysis, all of these factors work together to help create vibrant, memorable and prosperous destinations. There is no magic formula. Commercial design and development is just as much art as it is science. But, regardless of the state of the marketplace, these elements will always be an integral part of every great development.
Location
If “location, location, location” is a familiar residential real estate cliché, it is all the more important when it comes to retail and mixed-use development. From the smallest strip of inline retail to the largest, most dynamic stand-alone mixed-use project, location is the most important consideration. Because projects are all too often driven by what space is available, rather than what is optimal, it is easy to make compromises when it comes to location. Part of the reason we are seeing a resurgence in the renovation and rehabilitation of formerly enclosed malls is because savvy developers are all too aware of the importance of location, and the complications and logistical difficulties associated with a rehab project are considered a small price to pay for a quality site.
Visibility
If location is a reminder of the importance of site selection on a macro scale, visibility is a key element that considers the importance of a project’s location in relation to the surrounding community and existing infrastructure. Visibility means more than just positioning a project at a major intersection. Thoughtful architects and developers will consider the importance of sightlines into the project, and will evaluate the impact of prominent vertical elements, spectacular signage or strategically placed headline/anchor tenants at entrances and connection points.
Demographics
Closely tied to the issue of location, promising local and regional demographics are a vital prerequisite to a successful commercial development. This is one of those areas where developers rarely fail to appreciate the value of detailed information. One of the first and, unfortunately, sometimes one of the only questions asked about any proposed project is “what are the demographics?” While the numbers can reveal important information about a community, and can be particularly important in helping to identify places where there is strong, but underserved market potential, they are not the only factor to consider. Strong demographics are very important, but they are still just one element in a large and complex portrait.
Psychographics
Related to demographics, but often overlooked or underappreciated, are the psychographics of the surrounding community. Developers — not to mention banks — like numbers, and the study of local or regional psychographics does not lend itself to a clear numerical analysis as readily as demographics might. A psychographic profile refers to the values, perspectives or lifestyle characteristics of a population. An easy way to think about this, is to consider a psychographic profile as a regional “personality”. While demographic calculations can be relatively straightforward, psychographic influence on a new project can be harder to pin down. What is clear is that these cultural considerations can play an important role in determining what kind of project gets built. For example, is the community looking for a practical, convenience-based option, a dynamic, dining- and entertainment-heavy destination, or perhaps a more sedate and cohesive community space? These factors also can and should influence decisions about architectural design, layout and functionality, and tenant makeup.
Accessibility
Being able to get in and get out of a development in a manner that is convenient, efficient and intuitive is an important element of any successful project. An accessible project is a key to establishing an enjoyable experience, and those projects with affordable adjacent parking, a large number of prominent entrance and exit points, and a healthy mix of available and convenient vehicular- and pedestrian-friendly options already have one leg up on the competition. Accessibility dynamics can become exponentially more complex when residential components are introduced into the mix. Balancing parking and for residents and guests, and seamlessly incorporating the needs of park-and-grab convenience shoppers alongside those visitors who wish to stay for an extended period of time is also important.
Traffic Flow
The flow of vehicles past, around, into and through a site is another key indicator for success. The myriad ways in which internal and external traffic flow can work to not only accommodate, but actually enhance the experience of shoppers and guests, is actually growing in importance. These considerations are even more relevant today, with the industry continuing to trend toward designing more pedestrian-friendly projects and more developers embrace designs that recall a busy Main Street, USA small-town environment. The wide streets and parallel and on-street parking seen in so many of these town- and lifestyle-center layouts is an acknowledgement of the fact that in many of today’s projects (particularly urban infill and dense mixed-use environments), people are king. More and more developers understand that it is human energy that defines a space. Projects that embrace that dynamic while still facilitating smooth traffic flow are increasing their odds for long-term success.
Zoning
It is important to take into consideration not only existing zoning restrictions and flexibilities, but also the legislative realities and potential mechanisms in place that are available to change those conditions if needed. A favorable zoning environment is helpful, but a clear and compelling argument for the